Legally Enforceable?
Yes, a non-compete in Nevada is legally enforceable if it meets the following conditions:[1]
- Consideration. Must be supported by valuable consideration (such as an employment contract, promotion, compensation, etc.);
- Restraint. Cannot impose any restraint that is “greater than required for the protection of the employer;”
- No undue hardship. Cannot impose an undue hardship on the employee; and
- Appropriate restrictions. Imposes restrictions that are appropriate for the consideration being offered.
Effective October 1, 2021, hourly workers (exclusive of any tips or gratuities) are strictly exempt from entering into a non-compete agreement.[2]
Attorneys are not allowed to enter into a non-compete that restricts their ability to practice law in the State.[3]
Continued Employment
Maximum Term
The duration and geographical area are judged collectively whether it is reasonable or not. Therefore, if the time period is longer, the geographical area must be smaller, and vice-versa.
- In Ellis v. McDaniel (1979), a duration of 2 years and an area of 5 miles was reasonable.
- In Hansen v. Edwards (1967), a duration of 1 year for the City of Reno was reasonable.
- In Camco, Inc. v. Baker (1997), a duration of 2 years and 50 miles was unreasonable.
- In Jones v. Deeter (1996), a duration of 5 years and 100 miles was unreasonable.
Blue Penciling
“Noncompetition” Definition
“Noncompetition covenant” means an agreement between an employer and employee which, upon termination of the employment of the employee, prohibits the employee from pursuing a similar vocation in competition with or becoming employed by a competitor of the employer.[6]